An Original Equipment Manufacturer (OEM) is a company that produces
parts and equipment that may be marketed by another manufacturer. For
example, if Acme Manufacturing Co. makes power cords that are used on
IBMIBM computers, Acme is an OEM.
However, the term is used in several other ways, which causes
ambiguity. It sometimes means the maker of a system that includes
other companies' subsystems, an end-product producer, an automotive
part that is manufactured by the same company that produced the
original part used in the automobile's assembly, or a value-added
reseller.[1][2][3]

Automotive parts[edit]
When referring to auto parts, OEM refers to the manufacturer of the
original equipment, that is, the parts assembled and installed during
the construction of a new vehicle. In contrast, aftermarket parts are
those made by companies other than the OEM, which might be installed
as replacements after the car comes out of the factory. For example,
if
FordFord used
Autolite spark plugs,
ExideExide batteries, Bosch fuel
injectors, and Ford's own engine blocks and heads when building a car,
then car restorers and collectors consider those to be the OEM
parts.[citation needed] Other-brand parts would be considered
aftermarket, such as Champion spark plugs, DieHard batteries, Kinsler
fuel injectors, and BMP engine blocks and heads. Many auto parts
manufacturers sell parts through multiple channels, for example to car
makers for installation during new-vehicle construction, to car makers
for resale as automaker-branded replacement parts, and through general
merchandising supply chains. Any given brand of part can be OE on some
vehicle models and aftermarket on others.
Computer software[edit]
MicrosoftMicrosoft is a popular example of a company that issues OEM software
for their Windows operating systems. OEM product keys are priced lower
than their retail counterparts, but use the same software as retail
versions of Windows. They are primarily for direct OEM manufacturers
and system builders, and as such are typically sold in volume
licensing deals to a variety of manufacturers (Dell, HP, ASUS, Acer,
Lenovo, etc.). Individuals may also purchase them for personal use (to
include virtual hardware), or for sale/resale on PCs which they built.
Per Microsoft’s
EULA regarding OEM, the product key is tied to the
PC motherboard which it’s initially installed on, and there is
typically no transferring the key between PCs afterward. This is in
contrast to retail keys, which may be transferred, provided they are
only activated on one PC at a time. A significant hardware change will
trigger a reactivation notice, just as with retail.[4]
Direct OEMs are officially held liable for things such as installation
media, although they are not required to provide it upon sale of a PC
hardware, and may indeed exclude it to reduce cost. Instead,
manufacturers tend to include a recovery partition on the primary
storage device for the user to repair or restore their systems to the
factory state. System builders further have a different requirement
regarding installation media from Direct OEMs.[5] On versions of
Windows which require a valid product key for media download from
MicrosoftMicrosoft (like Windows Vista, 7, 8, 8.1, 10), OEM keys will be
rejected, and the party will be given a notice to refer to the
manufacturer.[6]
Economies of scale[edit]
OEMs rely on their ability to drive down the cost of production
through economies of scale. Also, using an OEM allows the purchasing
company to obtain needed components or products without owning and
operating a factory.
See also[edit]